Maruti mulls capacity hike at Manesar

Decision to be taken this week, says Bhargava.

The country’s largest car maker, Maruti Suzuki India, today said it is considering increasing the production capacity at its Manesar facility, and a decision on this is likely in a day or two.

“We are considering a capacity expansion at our Manesar plant.... The decision on capacity expansion will be taken in one or two days,” Maruti Suzuki India (MSI) Chairman R C Bhargava told reporters on the sidelines of the company’s Annual General Meeting (AGM) here.

The company would decide on increasing the capacity and investment needed with parent Suzuki Motor Corporation’s Chairman Osamu Suzuki, who has come to India to attend the AGM.

Last week, Bhargava said the company would have discussions with Suzuki on a range of issues such as further investment in the country, ramping up production capacity and handling the European export market.

The Manesar facility of the company, which manufactures A-Star, SX4, Swift and Swift Dzire, has a capacity of 300,000 units a year and last month crossedthe 500,000 units mark in production within 35 months of commercial operations.

MSI also has a diesel engine plant, located inside the Manesar facility, that produces 240,000 units a year.

Speaking in the AGM, Bhargava said: “The worldwide recession, which started in 2008, has taught us many lessons and also confirmed the validity of our strategies... We have weathered the recession much better than others.”

“We are debt-free and have a healthy cash balance. We have financed all growth from internal resources,” Bhargava said.

The company’s efforts at cost cutting and improving productivity, even in good times, helped in making “reasonable” profits despite the impact of higher commodity prices and a weaker rupee, he added.

“We have recruited about 300 engineers in this period, all other reqruitments were stopped,” he said.

On MSI’s R&D capabilities, Bhargava said, “With strong support from Suzuki, we are on course to develop our ability to design and manufacture small cars.”

The company is investing up to Rs 1,500 crore in building test tracks and an R&D centre in Rohtak, Haryana.

Earlier last week, Bhargava said the company had planned to increase its exports over two-fold this financial year to 150,000 units from about 70,000 units during 2008-09.